Opportunities for Louisiana in the Expanding Biofuel Industry

The biofuel industry in the United States has expanded tremendously over the past decade. Consumption of biofuels has increased faster than any other energy source in recent years. The rapid expansion of this relatively new industry has occurred as the result of several factors, the most important of which has been this country’s growing dependence on foreign oil, which primarily is converted into transportation fuels for use by U.S. consumers and businesses.

In 2008, the U.S. Department of Energy reported that U.S. consumption of crude oil and petroleum products was 19.4 million barrels per day. Domestic production of crude oil (from Alaska and the lower 48 states) declined 39 percent since 1973 and was only 6.7 million barrels per day last year. As a result, the United States imported 12.7 million barrels per day of crude oil in 2008 to meet our energy needs. These imports accounted for 65 percent of our total petroleum consumption. By comparison, petroleum imports in 1973 were 6.3 million barrels per day, accounting for only 36 percent of total petroleum consumption.

Production of biofuels from renewable feedstocks in this country provides a means for decreasing our dependence on foreign oil. With its diverse agricultural and forestry production sectors, Louisiana has tremendous potential to develop its own biofuel industry.

Challenges currently facing the biofuel industry include the food-versus-fuel debate and the broad diversity of potential crops for use as biofuel feedstocks. Biofuel research and extension efforts in the LSU AgCenter are under way in the areas of feedstock development and biofuel production. LSU AgCenter scientists are identifying opportunities for Louisiana in this new and expanding industry.

What are biofuels?

Several terms are commonly used in the news media when referring to the expanding bioenergy industry, including renewable energy, biomass and biofuel. It may seem these various terms all refer to or mean the same thing. Actually, each of these terms is distinctly different, although directly related to each other.

Renewable energy refers to those sources of energy that are naturally replenishing but limited in quantity at any one time. Examples of renewable energy include energy generated from hydropower, geothermal sources, biomass, and solar and wind power, as well as ocean thermal, wave and tidal actions. In 2008, renewable energy accounted for 7.5 percent of total U.S. energy consumption.

Biomass is one type of renewable energy source and generally refers to any organic, nonfossil material of biological origin. Currently, the United States has three primary sources of biomass renewable energy – wood, waste and biofuels. Last year, biomass energy sources represented 53.2 percent of renewable energy consumption and 3.9 percent of total U.S. energy consumption. Wood is the most common type of biomass energy source and has a long history of providing energy for heating and cooking as well as producing steam for electric generation. Waste as a source of biomass energy is primarily composed of municipal solid waste burned for energy or biogas captured from landfills. Biofuels, the third major biomass energy source, consist primarily of ethanol and biodiesel. Produced from biomass sources and used for transportation fuels, biofuels are the fastest-growing source of energy in the country today.

Biofuel industry grows

In 1980, the United States produced 175 million gallons of ethanol for use as a transportation fuel. By 1995, the annual production level had risen to 1.4 billion gallons. However, over the next several years as the price of gasoline rose and the cost of corn, the primary feedstock used in producing ethanol, remained relatively cheap, U.S. domestic production of ethanol skyrocketed. Construction of ethanol plants expanded tremendously, primarily in the Midwest to minimize corn feedstock transportation costs. U.S. ethanol production was 2.1 billion gallons in 2002 and increased to 9 billion gallons in 2008. The Renewable Fuels Association reports that the total number of ethanol plants in the United States expanded from 50 in 1999 to 170 in 2008. Production capacity over the same period increased from 1.7 billion gallons to 10.5 billion gallons per year with another 2.0 billion gallons of capacity currently under construction. The use of ethanol as a transportation fuel in blends with gasoline has surpassed domestic production in recent years. Most ethanol imported to make up this shortfall has come from countries such as Brazil, El Salvador, Jamaica and Costa Rica.

Although much smaller in scale than ethanol, biodiesel production in the United States in recent years has expanded just as dramatically. Biodiesel can be made from a variety of feedstocks – including soybean oil, canola oil, other vegetable oils, animal fats and recycled cooking grease – and serves as a direct substitute for diesel made from petroleum. In 2000, only 2 million gallons of biodiesel were produced in the United States. By 2008, this annual production value increased to 683 million gallons. With current biodiesel fuel use only about half of domestic production, the United States has become a net exporter of biodiesel, with the majority of these exports bound for the European Union.

Industry faces challenges

Despite its tremendous recent growth, the biofuel industry in the United States faces several major challenges. One of these concerns the so-called food-versus-fuel debate. The argument by some interest groups is that corn should be used for food, a more pressing basic need, rather than fuel. Furthermore, some have argued that the use of corn as a feedstock in ethanol production was one of the major causes of the recent rise in commodity and food prices.

For the 2008-09 fiscal year, the U.S. Department of Agriculture estimated 4 million bushels of corn – 29 percent of the total U.S. corn supply – were used for ethanol production, with the remainder used for food, feed and exports. Earlier this year, the Congressional Budget Office released a study that reported that the rise in the price of corn resulting from expanded production of ethanol contributed only 0.5 to 0.8 percentage points of the 5.1 percent increase in food prices from April 2007 to April 2008, as measured by the consumer price index. Other factors, such as higher energy costs, were reported to have a greater effect on food prices than the use of corn as an ethanol feedstock.

A more critical challenge facing the biofuel industry is related to the process used to make biofuels. Until now, the primary feedstock to produce ethanol in this country is corn, and the production process involves conventional, long-established fermentation technology. However, when evaluating biofuel production from a technical efficiency standpoint, the production of ethanol per acre of feedstock using conventional fermentation procedures is much less efficient in the use of those feedstocks and land resources compared with more advanced biofuel production technologies.

Much of the focus of current research is in the area of advanced biofuels using cellulosic, syngas and algae production technologies. Cellulosic ethanol production, as the name suggests, uses cellulose in various plant materials as the primary feedstock. Syngas, a synthetic gas used as an energy source, contains varying amounts of carbon monoxide and hydrogen, which can be produced from biomass feedstock sources. Oil produced by algae is being converted into biodiesel, and algae’s carbohydrate content can be converted into other types of biofuels, including ethanol and butanol. Although the use of corn as an ethanol feedstock and soybean oil as a biodiesel feedstock is expected to continue to grow over the next several years, the future direction of the biofuel industry lies with the development and commercialization of these more advanced production processes.

Related to the development of cellulosic ethanol production is the corresponding challenge of identifying the optimal feedstock for use with this technology. Unlike corn ethanol production, which has few feedstock substitutes, cellulosic ethanol can be made from a wide variety of biomass sources. In theory, the cellulose in any plant material can be broken down to produce ethanol. Potential cellulosic ethanol feedstock sources include trees, agricultural crops and perennial grasses. The array and availability of these potential feedstocks vary tremendously across the country.

Louisiana has probably one of the greatest arrays of diverse feedstock production potential for cellulosic ethanol and advanced biofuel production in the country. High-fiber "energy" sugarcane, switchgrass and miscanthus are just a few of the potential feedstock crops being evaluated. The challenge is to identify those feedstocks for which a particular state or region has a comparative advantage. Production costs, harvest costs and transportation costs of these potential feedstocks are all critical factors in this challenge.

AgCenter research, extension help lead

With its diverse array of agricultural and forestry production enterprises, as well as its extensive petroleum and natural gas infrastructure, Louisiana has tremendous potential to develop an economically viable and sustainable biofuel industry. Such an industry has the capability to provide the state’s existing agricultural and forestry sectors with new opportunities to produce additional commodities and products that would enhance their long-term economic viability.

The LSU AgCenter has a broad array of ongoing research projects and extension activities that have the overall goal of identifying opportunities for Louisiana in the new and expanding biofuel industry. Articles included in this special focus issue of Louisiana Agriculture provide a summary of the wide-ranging areas of investigation the LSU AgCenter is pursuing in biofuel feedstock evaluation and production technologies.

Current research and extension activities across units within the LSU AgCenter cover a broad range of bioenergy feedstock development and biofuel conversion technologies.

Scientists at the Audubon Sugar Institute are evaluating cellulosic ethanol production utilizing energy cane as a feedstock as well as utilizing biochemical and thermochemical processes to produce a variety of "second generation" biofuels.

Projects in the School of Renewable Natural Resources involve investigating hydrothermal processing of biomass, while conversion of wood and other biomass into liquid and gaseous products is being analyzed at the Calhoun Research Station.